Dec. 21/01 presidents message. I just had a re-read and note some timing highlights. Indeed, REK should have something in the way of an update and press release next week. Failing that, the sell off continues. Quarterly results must be released by law within 3 months of quarter end. If not good, they at least should be wrapped in something pretty...
With a momentous 2001 virtually completed, and an even more exciting 2002 just ahead, I would like to take this opportunity to review some of the significant corporate developments that occurred this past year and those we anticipate in the New Year.
Firstly, I would like to thank our shareholders, especially those stalwarts who have been with us from the beginning, who have maintained their faith in our products, and are now poised with us to take PENNSAID® across North America and Europe. While our stock was victim to the volatility in 2001 that affected most of the market, both before and after the tragic events of September 11, the past three months have seen stability in our share price, with some recent small gains that perhaps reflect the growing realization of the magnitude of the events to come.
In 2001, clearly our major milestone was the launch of PENNSAID® in the United Kingdom, and the commercial distribution of this product in the UK, by Provalis Healthcare Ltd. The UK market has some hurdles not expected in North America, including an unsatisfactory history of previous topical NSAIDs, and a historic reluctance to prescribe new pharmaceutical products without lengthier sampling and patient experience. Despite this tougher climate, Provalis is enthusiastic about PENNSAID®, and as promised, we will be providing both sales to-date, and a detailed forecast of future sales when we announce our Fiscal Second Quarter results next month.
In July, we announced our intention to purchase the remaining 80% of Oxo Chemie AG. We have held 20% of Oxo since 1997, and have always felt that their lead compound, WF10, provided exciting opportunities, especially in HIV/AIDS and oncology. We are pleased to announce that we have signed a Heads of Terms with Oxo, a binding memorandum of understanding which will allow consolidation of the four privately held entities currently in place in Germany, Switzerland, Thailand, and the USA, and will also allow Dimethaid to assume the day-to-day management of all Oxo clinical research. Under this Heads of Terms agreement, an initial cash payment of $500,000 will be followed by supplementary payments on the anniversary dates over the next 5 years, of either cash or shares, at our discretion, thereby not taxing crucial cash reserves, nor causing dilution of Dimethaid stock. Due to the complexity of the multi-country entities involved, the actual purchase will not be completed for another month or two. Once all of these steps are completed, and actual ownership is transferred, we will be able to issue a press release announcing all of the details. In the interim, however, the critical day-to-day business of Oxo will be able to continue, and most importantly, with the help of Dimethaid's clinical and regulatory affairs departments, the pivotal Phase III study of WF10 in late-stage AIDS patients can now be completed, and the results announced when available.
Another recent pivotal event was the completion of an inspection by the US Food and Drug Administration (FDA) of our manufacturing facility in Varennes, Québec. The purpose of this inspection was to determine the acceptability of this facility to produce PENNSAID® for the US Market. Clearly, this was an exciting step towards regulatory approval in the USA. We have also recently completed new financing on this plant, to capitalize on the low interest rates currently available, and have received $2.5 million of a potential $6.5 million loan to cover the plant expansion and upgrades necessary to manufacture PENNSAID® for the North American, European, and Caribbean markets. This financing was provided by Investissement Québec, and is secured by a mortgage on the manufacturing plant.
In October, we advised you of the commitments for approval from Austria, Finland, Italy and Luxembourg resulting from the European Union's Mutual Recognition Procedure (MRP). We have provided the necessary translation, labeling, and packaging requirements for these four countries, and await their final marketing approval. In the interim, as we previously disclosed, we are proceeding on an individual country basis with other member nations of the EU, and will be meeting in London in early January in an attempt to speed this process along. As part of these deliberations, we have met with potential distribution partners who can provide European marketing expertise for not only the four committed countries, but who can also be able to lend support for the rest of Europe. We hope to be able to announce the results of these negotiations early in the New Year.
In the Caribbean, we had told you of our choice of A.S. Bryden & Sons (Barbados) Ltd. as our marketing distributor in Barbados, Jamaica, Trinidad & Tobago, Grenada, St. Lucia, Antigua, St. Vincent, Dominica, Montserrat, Tortola, St. Kitts and Guyana. We have been advised that A.S. Bryden has chosen to launch the 30ml. size bottle of PENNSAID® Topical Solution, and will roll out this product in a planned January launch.
Finally, in this busy year, we had hoped to be able to place a checkmark beside Health Canada in our "Approved" column for PENNSAID®. While we are still waiting for the Notice of Compliance and Drug Identification Number, we remain extremely optimistic of the completion of this process. Our sales force is ready and poised to launch the product in Canada as soon as approval is received, and they are busy finalizing sales strategies, target profiles, and distribution outlets in eager anticipation of this event.
While the calendar year 2001 was perhaps the busiest year so far in our corporate history, 2002 promises to set an even higher standard. The following are just a few of the events we anticipate in the upcoming months.
With the plant inspection completed, we expect to receive the inspector's written report from the FDA by the end of January. Once we have been officially apprised of the results of this inspection, we will be passing the information along to you. The completion of this important milestone on the road towards FDA approval, will be a signal towards finalization of a PENNSAID® distribution agreement for the US. We are also planning, subject to market conditions, to secure a NASDAQ listing for Dimethaid, to fully capitalize on the potential created by the launch of PENNSAID® into the important US market. The market in the US for NSAIDs is currently estimated to be in excess of $8 billion US, treating an arthritis patient population of over 40 million people. A product with the safety and efficacy of PENNSAID®, when detailed and marketed to US physicians, will offer an exciting new topical solution and a welcome relief for arthritis sufferers.
In addition to the US opportunities, 2002 will see the availability of PENNSAID® into other European markets, our long-awaited launch in Canada, and the continuation of research into other products in our planned pipeline. The realization of these events will provide us with the necessary cash reserves to initiate multiple ongoing clinical trials. We have previously discussed the research we are pursuing in onychomycosis (nail fungus), and we are excited also at other potential applications, such as acne. For WF10, to supplement the important research in HIV/AIDS, we anticipate exploring areas such as oncology and other autoimmune diseases. We hope you share our enthusiasm for the opportunities we envision unfolding in 2002.
On behalf of our employees in Markham, Ontario, Varennes, Québec, and Bridgetown, Barbados and all of those eager sales representatives across Canada, we wish all of you a joyous holiday season and join with you in looking forward to a very prosperous New Year!
I now invite you to browse the rest of our website. Please note that there is a place where you can sign up for e-mail notification of future announcements and updates for easy monitoring of our progress.
Sincerely,
Rebecca E. Keeler
President and C.E.O.
Dimethaid Research Inc.
December 2001 |
